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ITC shares rise after June-quarter cigarette earnings hit
Cigarette Ebit fell 35% year-on-year to ₹3,341 crore in Q1FY27, but analysts cited improving month-on-month profitability and resilient volume as signs of stabilization.
LiveMint Markets said ITC’s shares rose about 2% on Monday, even as the stock remains down 29% so far in 2026. The move came after investors looked past a bruising June-quarter in ITC’s cigarette business, which absorbed the first full-quarter impact of a sharp cigarette tax increase effective 1 February.
The cigarette segment’s earnings before interest and tax (Ebit) dropped 35% year-on-year to ₹3,341 crore in the June quarter, with ITC’s cigarette business still contributing 76% of total segment Ebit, down from nearly 84% in FY26. LiveMint Markets noted comparisons to other cigarette makers, where cigarette Ebit declined 52% at Godfrey Philips India and 41% at VST Industries.
Analysts quoted by LiveMint Markets pointed to staggered price hikes and improving profitability. Nomura Financial Advisory and Securities said April was the most affected month, followed by month-on-month improvement supported by staggered price hikes, while Jefferies India expected management to gain confidence to pursue additional price increases while keeping volume declines to the mid-single digits for the rest of FY27.
Despite the softer quarter, resilient volumes helped support the turnaround narrative. LiveMint Markets said ITC’s cigarette volume fell 5% year-on-year in Q1FY27, versus 2% and 14.4% declines for Godfrey Philips and VST respectively, and it reported that standalone net operating revenue fell 14.4% year-on-year to ₹16,907 crore, while Ebitda margin contracted 500 basis points to 26.7%.